America's biggest bank just proved the economy has plenty of fuel

The US economy keeps chugging along, and it appears that it's adding even more fuel.

Wells Fargo, the largest US bank by market capitalization, released second-quarter earnings Friday, and while the company reported profits right in line with expectations, underneath the hood was some great news for the economy.

In nearly every category, Wells added to its loan portfolio, indicating a strong desire for credit from both businesses and households.

The most encouraging segment is probably commercial and industrial loans, or C&I, which are given to businesses that are looking to make large investments. According to Wells, its C&I loans grew by $39 billion, or 14%, from the year before. Commercial real-estate loans also increased by $10.7 billion, or 8% (which may or may not be a good thing).

Americans also increased their loans from Wells. Credit card loans grew by $3 billion, or 10%; automobile loans were up $4.1 billion, or 7%; and mortgages increased $9.3 billion, or 3%.

Wells Fargo

The growth in C&I is particularly encouraging given that recent data from the Federal Reserve's Senior Loan Officers Survey reported that loan officers who actually issue credit said their standards were tightening. Tighter standards usually presage a decline in the growth of C&I loans and eventually a slowing in investments by businesses, so the counterfactual from Wells is welcome relief.

Additionally, households have been reluctant to take on more debt since the end of the recession, which leads to lackluster consumption and suppresses GDP growth. Thus, the increasing number of people buying houses, cars, and goods on their credit cards may be a positive contribution to the economy and indicates that the households feel good about their financial situations.

Households are also able to pay back these loans. During the quarterly earnings call following earnings, Wells CEO John Stumpf said that net charge-offs for mortgages were under 2% for single family home loans and for secondary loans they were roughly 0.25%. Charge-offs measure the loans that the bank writes off as a loss during a quarter and the lows levels were "the best you can ask for" according to Stumpf. So not only are Americans taking out more loans, but they're able to pay them back.

To be fair, this is just one bank, so it's more a positive sign than the total picture, but Wells is the third-largest bank by total assets and has the second-largest loan portfolio, so growth in loans from the bank is notable.